Eurostar fury: Johnson says bailout to avoid ‘dire consequences’ for UK | UK | New
Eurostar is on the verge of collapse after the pandemic left the service in financial turmoil. Eurostar is believed to have already faced a 95% drop in demand as the pandemic continues to make travel restrictions necessary. The company’s annual revenues have grown from £ 1 billion (€ 1.1 billion) in 2019 to around £ 180 million (€ 208 million) in 2020. On top of that, Eurostar has already borrowed 400 million pounds (460 million euros) and received a cash injection of 170 million pounds (197 million euros) from its owners.
The rail operator is also under pressure to raise funds amid the £ 400million debt that hangs over its head.
This led to a disagreement between French politicians and the UK government over a bailout fund.
Prime Minister Johnson was pressured to help the company, but the UK sold its share of Eurostar in 2015 for £ 750million (€ 863million).
Meanwhile, the French national rail company SNCF owns 55% of the company.
But Eurostar also employs around 3,000 people in the UK.
The Railways, Shipping and Transportation Union (RMT) called on the government to help the service last July.
Deputy Secretary General Mick Lynch said: “Short-term cuts would have disastrous long-term consequences.”
He said the union would seek talks “to end this slaughter of jobs and services which would leave Britain ill-equipped to revive the economy with tourism and cross-Channel commerce.”
Manuel Cortes, Secretary General of the Transport Salaried Staffs Association (TSSA), added: “Eurostar provides a strategic green link between Britain and our European neighbors. It is absolutely crucial that these services are retained.”
Huw Merriman, chairman of the Commons Transport Selection Committee, joined calls in the UK to find a solution for Eurostar.
Mr. Merriman continued: “Services have been reduced to the bare minimum. He needs a joint Franco-British solution to help him get through this crisis.
READ MORE: Eurostar warned survival at ‘real risk’ as France and UK collide
“There is no comparison for it, and it can and will lead to the bankruptcy of a number of companies, unless there is the political will to prevent it.”
The Channel Tunnel operator is in advanced talks with a group of banks, including UK taxpayer-backed NatWest, to secure vital funding.
Insiders said the company’s attention has turned to restructuring its loans, after weeks of lobbying ministers on both sides of the Channel for a bailout that has yet to lead to a agreement.
There is an option for Eurostar to extend the June repayment deadline by an additional 12 months, but that would mean the company would have to comply with strict financial rules.